Tag: business

Rethinking startup rules

Much of the current mindset around investing and supporting startups creates barriers to founding new businesses. What can we do better?

What are some of the barriers to increasing diversity in the startup community’s monoculture? Yesterday we had an insight into some of the changes needed at the Women in VC forum held in Sydney.

Samantha Wong, partner at early stage startup accelerator Startmate and Head of operations at Blackbird Ventures, described how Startmate identified some of those barriers among the 51 companies that went through the program and the steps to overcome them.

What Samantha and her team found illustrate how the Silicon Valley model of founding and funding businesses inadvertently creates obstacles for women, older workers, disadvantaged groups and poorer people.

Insisting on Solo Founders

“Previously we had a rule that you couldn’t be a solo-founder. It’s too much work to do it by yourself,” she explained.

There’s good reason for that belief as building any business on your own is hard, regardless of whether it’s a tech startup or a dog walking franchise.

It’s understandable that investors are reluctant to get involved with a ‘one person show’, although a lack of capital is going to make life extraordinarily harder for a sole founder or proprietor.

The myth of the tech co-founder

“You had to have at least one technical co-founder in the team.” Samantha explained, “the reasons for this rule were historical.”

This belief goes back to the origins of the Silicon Valley business model where companies like Apple, Hewlett-Packard, Microsoft and even Google were founded by ‘two men in a shed’ where one was the marketing or sales whiz and the other delivered the product.

Interestingly many of the recent successes like Facebook, Uber and AirBnB haven’t had that dynamic, probably because the technology industries have matured to a point where developer and product managers are established trades or professions are easily available as well as cloud based tools making technology itself more accessible.

So a ‘tech co-founder’ will almost certainly be useful but isn’t essential to get a business off the ground in today’s tech environment.

Being in attendance

“We had a blanket rule of requiring participants to be in Sydney for the full duration of the program,” says Samantha. “The reason for this we know from experience that ninety percent of the program’s value comes from that sharing which happens between founders, the support and the friendly competitive pressure you get from them. It brings the best out of you.”

Startmate changed its policy so only one of the co-founders needs to be in Sydney. While it doesn’t solve the problem of solo founders with family obligations that don’t want to move, it does make it easier for those with dependents to participate.

Dropping the blanket rules

Over the six years Startmate has been running, they’ve seen a change in the nature of startups joining the program. “When the program started in 2011 we gave a small amount of money to a couple of people to build a product and start attracting customers,” Samantha said.

“By 2016 we were attracting much later companies that already had revenue and the program’s focus became growth and fund raising.”

“So instead of blanket rules we started to ask ‘what does this company need to grow in the next three to six months?’ Do they enough resources right now? Is the product good enough to sell? If you can get good answers to those then it’s worth considering them joining.”

The lessons from Startmate in increasing diversity among their intake are instructive and it indicates the limits of the Silicon Valley model that favours young, middle class men over other groups.

For the tech industry, that focus on one group is a great weakness and means investors are missing a world of opportunities. Ditching existing biases and established wisdom could be a very profitable move from everyone.

Meeting the future head on

What lies ahead for business is the topic we’ll be looking at the Meeting the Future Head-On panel

What can businesses do to prepare for an exciting but challenging future?

As part of the New South Wales Government’s Back to Business Week, I’ll be on the Meet the Future Head-On panel looking at the future of business and work.

Facilitated by Jo Kelly, Director of People, Place and Partnership, the seminar will look at local and global business changes and what they mean for small to medium companies.

The keynote speakers are Terry Rawnsley – Principal & Partner of SGS Economics and Planning – who’ll discuss his company’s analysis of the economy in the year 2026, and Karen Borg – the Chief Executive Officer of Jobs for NSW – with an overview of the state’s Jobs for the Future report.

Joining me on the panel will be Paul Fairhead, the Managing Director of Huddle; Jost Stollmann, the Executive Director of Tyro Payments and Marianne McGee, the owner of Allis Technology.

Tickets for the 6pm event on March 1 at the Sydney International Convention Centre are free and can be booked through Eventbrite.

Come along and have your say. Look forward to seeing you there.

When is a Chief Digital Officer needed?

The contrasting attitudes of Sydney, Melbourne and Brisbane towards the need of a Chief Digital Officer tell us much about how that role fits into an organisation

Last week the City of Sydney and councillor Jess Scully came under fire for an apparent backflip about the need for a Chief Digital Officer.

Scully, who was elected at last year’s council elections, told InnovationAus “the idea of a CDO or chief innovation officer seems a little bit redundant” a day before the organisation advertised for ‘chief, technology and digital services officer’.

To be fair to Scully, the roles being advertised by the City of Sydney were not truly CDOs in the way Brisbane, which has a small business focus, and Melbourne’s city councils have appointed them however it raises the question of whether Scully is right that an organisation doesn’t need a Chief Digital Officer.

As with most questions of this nature, the answer seems to be ‘it depends’. A key part of that discussion is where a CDO sits in an organisation. If they are senior executive or even board role, then it’s likely they are going to come into conflict with other c-suite managers such as the COO and CFO.

What’s worse, such a conflict in the c-suite can mean digital issues can be seen as ‘belonging’ to the CDO and not other key business units, which can only be to the detriment of the organisation.

There’s an argument too that the changes to organisations is so great from the changing economy and emerging technologies that responsibility of understanding and dealing with these changes is the role of the CEO and the board.

Where a CDO can be very effective is being an advocate for change and a trusted adviser to senior management, however even there risks lie as identified by Paul Shetler who found the siloing of agencies within the Australian Public Service meant it was very hard to effect any change in the face of resistance from an organisation’s vested interests.

It seems from the story that the City of Sydney has chosen an advocate and support role for the digital officer position, rather than formalise a CDO position who becomes a figurehead for the organisation’s digital evolution.

For a CDO or any technology advocate to be effective, there has to be support from the board and senior management. A technologist can only drive change if they have a mandate from the top.

Even then in some organisations the culture may be so factionalised that the response to change and drive for digital transformation has to come from the existing powerbrokers and a CDO could be at best a hindrance and even obstruct the process.

So the City of Sydney and Jess Scully aren’t wrong in not having a Chief Digital Officer, and neither are Melbourne and Brisbane for having one, it’s a deliberate decision by the various managements to choose the structure and roles that works best for their organisation. Driving change though always remains the responsibility of the board and the CEO they appoint.

Goodbye to Yahoo!

The demise of Yahoo! shows eyeballs are not enough for a mature online business.

And so Yahoo!’s journey comes to an end with the company being renamed Altba and most of its operating assets given over to Verizon.

With the changes both CEO Marissa Mayer and original co-founder David Filo will leave Altba’s slimmed down board.

Mayer’s failure is a lesson that being an early employee at a successful, fast growth tech startup isn’t a measure of leadership. It may even be a hindrance given companies like Google were inventing new industries during her tenure there which develops different management skills to what a business like Yahoo! needs.

The biggest lesson of Yahoo!’s demise is how even the most powerful online brands isn’t immune from disruption itself, with what was once the internet’s most popular website being eclipsed by Google and Facebook.

Interestingly, as Quartz reports, Yahoo! is still one of the US’s most popular sites and only slightly behind Google and Facebook in unique monthly views.

Despite this, Yahoo! has struggled to grow for 15 years and has struggle to make money although it remains a four billion dollar a year business.

Which shows eyeballs aren’t enough for a mature web business, at some stage it has to show a return to justify its valuations.

Among Yahoo!’s many properties remain some gems like Flickr and it will be interesting to watch what Verizon does with them. Sadly any successes will be tiny compared to what the company once promised.

Uber’s sharing strategy

Ubers offer to share information with city governments and agencies is part of their bigger data strategy

For most of its existence, Uber hasn’t been shy about claiming to be at the forefront of the future of transport which fits into yesterday’s announcement of Uber Movement which promises to provide aggregated and anonymised trip data to give communities and businesses an overview of road usage in their districts.

Jordan Gilbertson,  one of the company’s Product Managers, and Andrew Salzberg, Head of Transportation Policy, described how Uber intends to make transit time data available.

Uber trips occur all over cities, so by analyzing a lot of trips over time, we can reliably estimate how long it takes to get from one area to another. Since Uber is available 24/7, we can compare travel conditions across different times of day, days of the week, or months of the year—and how travel times are impacted by big events, road closures or other things happening in a city.

As the Washington Post reports, transport agencies do already have a lot of data on some aspects of commuter behaviour – particularly public transport usage – and the Uber information fills as ‘missing part of the puzzle’.

Taxis and buses are also increasing equipped with real time tracking equipment that also gives this data while traffic services like Wayze have been collecting this information for a decade.

So agencies aren’t short of this data and the concentration of Uber’s customer base in more affluent areas means their information may be skewed away from poorer areas. Recently a Sydney taxi driver mentioned to me how he’d stopped driving for Uber because most of the city’s sprawling Western Suburbs where he tended to drive didn’t use the service.

Uber’s offer is another piece in their data strategy that sees the company being a data hub for the logistics industry. It also helps if you’ve co-opted governments into your scheme.

Old king coal loses his merry men

Desperate rural communities look to obliging politicians to get mining jobs back. Sadly they won’t be returning.

The industrial revolution’s most important energy resource was coal, even today it generates most of the world’s electric power.

However, the last half century hasn’t been good for those communities and workers whose incomes are dependent upon coal as the industry has moved away from labour intensive ways of digging the stuff up, alternative sources of energy have developed and the consequences of dumping billions of tons of carbon into the planet’s atmosphere come to be understood.

The US Energy Information Administration’s annual report on the nation’s coal industry makes grim reading, with both production and employment levels falling.

Coal industry jobs were one of the touchstone issues in the recent US Presidential elections. As The Guardian reported, former staunch Democrats in the mining regions – some of America’s poorest counties – supported Donald Trump on the strength of the promise to reinvigorate the sector.

Sadly, as the EAI reports, those coal jobs are never coming back even if the world starts using more. Since World War II, the productivity of US coal mines has increased from .72 tons per worker to 5.22 in 2011.

Despite a recent slight drop in US productivity at the end of last decade – apparently due to spoil recovery during a period of booming prices – the trend is not good. As Australian academics warn, increased mine automation means jobs in that industry are going to become increasingly scarce.

Like Donald Trump and the distressed US mining regions, Australian politicians believe that coal mining will provide the jobs of the future. They are wrong.

Those communities and politicians hoping for jobs in the 21st Century may well be better off looking to the future rather than the past. Nineteenth Century thinking is not going to provide answers.

Saving pets with tech

Pet Rescue has a mission to make sure every rescued pet finds a home. By using the web they hope to save thousands of animals each year.

“Like all great ideas it was conceived over a beer and executed over coffee,” says John Bishop, the joint founder and co-CEO of Pet Rescue. “A couple of friends and I were sitting in a bar back in 2003 and we came up with the idea, had a look around and there was no-one doing it in Australia at the time.”

John was talking to Decoding the New Economy at last week’s AWS Re:Invent conference in Las Vegas where he some time to explain how Pet Rescue uses the web to connect prospective pet owners with rescue shelters.

“Basically we help people find rescue pets in need of adoption,” John explains. “We work with the vast number of rescue groups in Australia. By rescue groups I mean pounds, shelters, vet clinics and foster care networks. There’s about 950 of those in Pet Rescue at the moment.”

Rabbits, guinea pigs and rats

The system allows accredited animal rescue services to list the pets they have available for adoption, “primarily cats and dogs but also rabbits, guinea pigs, pigs, chickens, there’s even one rat we’ve rehomed,” John laughs.

John was working as an IT manager with a consulting business on the side in 2004 when the site launched. “We didn’t know if it would work but I had the idea in my head the whole time I was building it that if one pet found a home rather than being killed then it would be worthwhile.”

“From day one I designed Pet Rescue to be as hands off as possible, once the members had access to it they could upload their own photos and things like that. It wasn’t groundbreaking in 2003 but it wasn’t that common”

“One of the biggest problems we faced in those early days was many of the rescue groups didn’t have digital cameras. So we did a promotion with a bunch of Kodak digital cameras that had been donated to us and gave them to the groups.”

A problem of scale

The site was quickly a success but that came with issues, particularly when the site was mentioned in the press or had a lot of social media attention. “Eventually we hit problems as I had gave no thought of architecting a site that would scale.”

While that scaling process didn’t go without problems, the service now sits in the public cloud with AWS so the Pet Rescue team can get on with connecting pets with owners, and John expects to help rehouse four thousand pets by the end of the year.

“Our challenge at the moment is we have a weird supply and demand problem happening, we have half a million unique visitors a month and helping rehome about five to six thousand. Another challenge is we’re still working on an old model of handling enquiries about the pets.”

“Our goal is to get to the point where we rehome 200,000 pets a year. Right now we’re looking at 90,000. It’s a bit of a magic number because that’s the number of pets that are unnecessirly killed each year so if we can get to that two hundred thousand we can zero that out.”

Finding funding

The bigger task for Pet Rescue is to find funding with the organisation as John doesn’t believe paid registration for the rescue groups or users is the best thing for the site, “we want to have as few barriers as possible,” he says.

Currently the service earns some money from advertising with some corporate partnerships in the pipeline. “We need money, it costs a lot to keep the site up and costs a lot for development.”

While many startups and corporations talk about using tech for good, Pet Rescue’s and John Bishop’s mission of ending unnecessary deaths of unplaced pets is a genuine worthy cause. By making it easier for companion animals to be adopted by the right households shows what technology can do.

Paul travelled to Las Vegas and the Re:Invent conference as a guest of Amazon Web Services.

Having a culture of yes

Key to fostering a company wide culture of innovation is management’s willingness to say ‘yes’ says AWS CEO Andy Jassy

One of the biggest impressions from the AWS Re:Invent conference is the company’s rapid innovation with the firm’s executives boasting how they have offered over a thousand features on their services this year.

That sort of rapid change requires a fairly tolerant attitude towards new ideas and risk, which was something AWS CEO Andy Jassy explained at the media briefing.

“In a lot of companies as they get bigger, the senior people walk into a room looking for ways to say ‘no’. Most large organisations are centrally organised as opposed to decentralised so it’s harder to do many things at once,” he observed.

“The senior people at Amazon are looking at ways to say ‘yes’. We don’t say ‘yes’ to every idea, we rigorously assess each on its merits, but we are problem solving and collaborating with the people proposing the idea so we say ‘yes’ a lot more often than others.”

“If you want to invent at a rapid rate and you want to push the envelope of innovation, you have to be unafraid to fail,” he continued. “We talk a lot inside the company that we’re working on several of our next big failures. Most of the things we do aren’t going to be failures but if you’re innovating enough there will be things that don’t work but that’s okay.”

While Amazon’s management should be lauded for that attitude, they are in a position of having tolerant investors who for the last twenty years haven’t been too fussed about the company’s profits. Leaders of companies with less indulgent shareholders probably can’t afford the same attitude towards risk.

There’s also the nature of the industry that AWS operates which is still in its early days, sectors that are far more mature or in declines – such as banking or media respectively – don’t have the luxury of saying ‘yes’ to as many ideas as possible.

Jassy’s view about encouraging ideas in the business is worth considering for all organisations though. With the world changing rapidly, having a workforce empowered to think about new ideas is critical for a business’ survival.

The shine goes off the wearable tech market

FitBit and GoPro lose their lustre as smartphones take many of their features

Friday was a bad day for former startup darlings FitBit and GoPro with both companies disappointing investors.

GoPro, whose cameras for a while defined a new wave of adventure videos, announced a loss of $104 million dollars on the back of production issues and further disillusioned stockholders with a forecast of further poor sales in the upcoming holiday season.

Those shareholders have many reasons to be disillusioned with the camera maker’s shares reaching $98 two years ago after floating at $24. Today they are sitting at $11.

FitBit shareholders have suffered similarly, with the fitness band’s shares falling to eight dollars after listing at $20 almost two years ago. Their announcement of further problems on Friday saw the stock price dropping thirty percent on the day.

It may be easy to scorn investors in hindsight, but both companies were emblematic of a new generation of wearable technology and much of their problems today owes as much to them trying to stay ahead of the curve as it does from smartphones developing most of their products’ functionality.

The travails of FitBit and GoPro are typical of a time when new technology is changing business. Some companies  shine brightly then fade while others have a rocky road to success. We’ll have to wait and see if FitBit and GoPro survive.

Building a billion dollar business

Therese Tucker, founder and CEO of accounting automation service Blackline, has some useful lessons on building a new business

Last week accounting automation service Blackline listed on the NASDAQ stock exchange with a valuation of over a billion dollars.

The listing was a triumph for the company’s founder and CEO Therese Tucker who started the company in 2005 after a client asked her to find a way to manage the ten thousand spreadsheet their firm used for accounts reconciliation.

We spoke to Therese last year during a visit to Australia where she described some of the challenges of building a business.

Therese’s journey is an interesting, and inspiring, tale of how you don’t have to be a twenty something white guy to build a billion dollar tech business. Her story is worth listening to.

ABC Nightlife – building the businesses of the future

What can we do to build the next generation of businesses?

This Thursday night join Dom Knight and myself on ABC Nightlife to discuss what tools you can use to start or improve your business and how can we encourage more people to have a go.

Last week the last Australian car making jobs finished and a survey of the Geelong Ford workers found only one percent were interested in starting a new business.

If you missed the spot, you can listen to the podcast through the Nightlife website.

Despite the reluctance to start new businesses it’s never been easier to do so with a range of tools making it simpler to run one. Tonight on the Nightlife we look at some of those tools and what we can do to encourage more people to have a go at running their own companies.

For the program, I’ve a compiled a list of tools businesses should be using. It certainly isn’t exhaustive or definitive and if you have any suggestions on better or newer tools, I’ll be happy to add them.

Some of the questions we cover on the program include;

  • who ran the survey of motor industry workers?
  • what were most of them going to do?
  • so what sort of businesses can these workers go into?
  • what programs are being offered to these workers?
  • how has starting a business changed over the past twenty years?
  • is the focus on tech startups intimidating people who might want to start a business?
  • what are the basic tools every business should have?
  • a few years ago social media was all the rage, does it matter any more?
  • what’s the number one advice for anyone thinking of starting a business?

Join us

Tune in on your local ABC radio station from 10pm Australian Eastern Summer time or listen online at www.abc.net.au/nightlife.

We’d love to hear your views so join the conversation with your on-air questions, ideas or comments; phone in on 1300 800 222 within Australia or +61 2 8333 1000 from outside Australia.

You can SMS Nightlife’s talkback on 19922702, or through twitter to @paulwallbank using the #abcnightlife hashtag or visit the Nightlife Facebook page.

Speaking American – learning the language of Silicon Valley

While the business cultures of the US and Silicon Valley may look familiar, they are very different to other communities warn Australian startup founders

This is the last of four stories I did for The Australian on why entrepreneurs are making their way to the United States’ Bay Area.

“It is a very good time to be Australian in America,” says Dr Catriona Wallace , the Sydney based founder of Flamingo Customer Experience. Despite that goodwill she and those who’ve made the move to the US have found the ways of doing business in the two countries can be quite different.

US decision making processes are one trap, Wallace observes. “Americans will say ‘yes, yes, yes then no’, whereas Australians will say ‘no, no, no then yes,’“ she told The Australian. “I had to learn that an enthusiastic “Yes” from an American is an expression of their interest and intention, not necessarily an action that can be followed through.”

Swinging for the fences

Casey Ellis, who relocated his Sydney security startup Bugcrowd to San Francisco in 2013, finds the scale of ambitions are a key difference between the two countries. “Americans are comfortable with those who swing for the fences whereas Australians aren’t.

“I had a million dollars committed already but people weren’t buying my execution because the way I was selling it was that I had it all figured out, which is what I’d been taught what to do in Australia – we’ve figured how to make sausage machine then the key to making more money is to build a bigger handle and crank out more sausages.”

The reality though is different in the United States warns Ellis. “If I’m pitching like that to VCs over here they’re like ‘we like what you’re doing but your vision is too small.’ I always had a big vision for Bugcrowd but I’d been taught not to put that at the front. In the US you put the vision first and the execution follows.”

Figuring out the differences

“I spent some time trying to figure out why it is different,” Ellis reflects. “If you think about it Australia is a country was formed by a bunch of people who were thrown out for stealing stuff, dropped on a rock and told to figure it out, so we’ve got this incredible culture of troubleshooting and innovation but we’ve also got this tall poppy syndrome of ‘don’t stick your head out too far.’ That’s a very strong cultural feature of Australians and how they interact.”

“If you bring that over to America you will fail because this country was formed by entrepreneurs who set out to find a new land,” Casey concludes. “It’s not about saying Aussies are meek, they’re not, but Americans are completely comfortable with swinging for the fences and Australia’s aren’t.”

Peter Grant of Safesite warns not to overplay the Paul Hogan persona. “Coming from Australia is a novelty but you can’t play the dinky di Aussie card, you have display professionalism and represent you are serious about being a US company and serving the US environment,” he told The Australian. “Americans are a lot more accepting of risk and have a fear of missing out on the next big thing.”

“The country is founded upon going out and doing your own thing and being a maverick, so they are a lot more accepting of risk and have a bit more of a fear about missing out on the next big thing, “ Grant explains. “We’ve developed a strategy of saying ‘we’re working on this, this is going to happen and we’re talking to your competitors.’ That seems to work.”

Watching the clock

One respect where Australians’ laid back attitudes come unstuck is in time keeping warns Flamingo’s Wallace, “Americans are super punctual. Conference calls typically start 5 mins before the hour rather than 10 minutes after as it would in Australia. Meetings finish at quarter before the hour so people can get to the next meeting 5 minutes early.”

“If people are delayed and get to a meeting a few minutes late they will apologise profusely for several minutes and then apologise again at the end of the meeting. American’s will warn of the need to finish a meeting at a certain time by saying, “I have a hard stop at quarter before”

Humour lapses

Another difference is the sense of humour, Dr Wallace warns. “Americans typically are not funny in business as we Australians are. There is not much joking in meetings. I once used the enormously funny expression of, ‘That customer experience would have been like having a hot chicken blood enema!’.”

“Instead of this being outrageously funny I was surrounded by a group of 10 executives whose mouths hung open in shock that I had just said something like that. The meeting tanked from there on….”

“All this being said, the American business community love Australians,” Wallace concludes. “They find us hard working, great at relationships, good at navigating politics, honest, authentic and transparent. In some ways they aspire to be more like us. We cut through the bollocks – although they don’t understand that word – or bullshit and get things done. Americans like that. We are generous. They like that too.”